Submit your email address below to receive email updates from Business24.
The deal to hand the West Coast Main Line rail franchise to First Group is to be delayed following a legal challenge by current operator Virgin who launched the challenge last week after losing its attempt to continue operating the route.
It was expected Ministers would sign the deal with First Group several days ago ut they have confirmed due to the legal challenge the contract has not been signed and "the competition remains live".
Virgin has run the West Coast Main Line since 1997, but lost out to FirstGroup, prompting it to demand a review.
Labour had also urged the government to defer signing the contract so that MPs could examine it. and more than 165,000 people have signed an online petition calling for the decision to be reconsidered.
In a written ministerial statement transport minister Theresa Villiers said: "As a result of a legal challenge, which the government intends to defend robustly, we have not yet signed the contract with First West Coast, and consequently the competition remains live."
The West Coast Main Line route serves 31 million passengers a year travelling between London, the West Midlands, the North West, North Wales and the central belt of Scotland.
Passenger numbers have doubled since Virgin started running the franchise.
FirstGroup has said it would introduce 11 new 125mph six-car electric trains on the Birmingham to Glasgow route and provide more direct services between destinations, as well as introduce improved wi-fi and food.